COURT OF APPEAL FOR ONTARIO OSBORNE, LASKIN, AND BORINS JJ.A.
DATE: 19990413 DOCKET: C30285
APPLICATION UNDER Rule 14.05(3) of the Rules of Civil Procedure
B E T W E E N : )
)
VERNIERE CATANIA ) James G. McLeod and
) Karen Williams (Applicant) ) for the appellants
(Respondent in Appeal) )
)
and )
)
ANGELINA GIANNATTASIO and ) Charles P. Criminisi NICOLINA MAIURI ) for the respondent
(Respondents) )
(Appellants) )
) Heard: March 24, 1999
)
On appeal from the order of Marshall J. dated June 30, 1998. LASKIN J.A.:
[1] The question on this appeal is whether an Ontario court has jurisdiction to declare void a deed executed in Ontario, transferring title to foreign land.
[2] By the deed, Eugenio Catania transferred property in Italy to his two daughters, the appellants Angelina Giannattasio and Nicolina Maiuri. The respondent, Verniere Catania, the brother of the appellants, brought an application to declare the deed “null and void” on the ground that his father was mentally incompetent when he signed it. On a preliminary motion brought by the appellants, Marshall J. held that an Ontario court had jurisdiction to decide the application. The appellants appeal from his decision.
FACTS
[3] The appellants and the respondent live in Ontario. They are the only children of Eugenio Catania, who died on January 17, 1993.
[4] By the terms of the deed, called a “Deed of Gift and Acceptance”, Mr. Catania gifted a house and a parcel of land in Salerno, Italy to the appellants. The deed, which was written in Italian, was signed in Ontario by Mr. Catania and the appellants on April 2, 1990. The respondent is not a party to the deed.
[5] Earlier, in 1983, Mr. Catania had made a holograph will in which he bequeathed the same house and parcel of land to the appellants. The will, unlike the deed, provides for a right-of- way over the property around the house in favour of all three children and a right of first refusal in favour of the respondent’s son on any sale of the house.
[6] After his father died, the respondent began proceedings in Italy to determine the validity of his father’s holograph will and to have his father’s property dealt with according to Italian succession law. Those proceedings are still unresolved.
[7] In March 1997, the appellants registered the deed in the land registry office in Italy. In May 1997, the appellants asked the respondent whether he wished to buy the house and parcel of land. Otherwise, the appellants said that they intended to sell both properties. The respondent replied by bringing an application to the Ontario Court (General Division) in which he challenged the validity of the deed, alleging that his father was mentally incapacitated when he signed the deed and therefore did not understand the nature of the document. Marshall J. did not give any written reasons for deciding that an Ontario court has jurisdiction to determine the validity of the deed.
DISCUSSION
[8] Although in their factums both counsel addressed the question whether the order under appeal was final or interlocutory, neither counsel raised the point in oral argument. We did not rule on the question and heard the appeal on the footing that the order of Marshall J. was a final order.
[9] I doubt whether the respondent has standing to attack the validity of the deed. He is not a party to it and he does not claim to be either the administrator or executor of his father’s estate. He argues, however, that he has standing because he is a beneficiary under his father’s will. Even if being a beneficiary gives him standing to challenge the validity of the deed, he cannot do so in an Ontario court.
[10] The deed transfers title to land in Italy. The general rule is that Canadian courts have no jurisdiction to determine title to or an interest in foreign land. This rule, long recognized in Anglo-Canadian law, was applied by the Supreme Court of Canada in Duke v. Andler1, in which Smith J. wrote at 738 and 741: “The general rule that the courts of any country have no jurisdiction to adjudicate on the right and title to lands not situate in such country is not disputed… The title to real property therefore must be determined by the standard of the laws relating to it of the country where it is situated”.
[11] This general rule has been criticized but may be justified by its underlying policy2. The courts of most countries insist on the exclusive right to decide disputes over their own lands. Thus, ordinarily a judgment by a Canadian court on a disputed title to foreign land would be ineffective. If Canadian courts cannot grant an effective judgment or an enforceable remedy concerning land in a foreign country, they should decline jurisdiction to decide these disputes. The respondent submits, however, that the Ontario courts do have jurisdiction to decide the validity of the deed. He argues that, although the declaration he seeks affects title to the properties in Italy, he is only asking for what amounts to equitable relief against two Ontario residents.
[12] I do not accept this argument. Admittedly, as Smith J. points out in Duke v. Andler3, a long line of authorities has held that Canadian courts have jurisdiction to enforce rights affecting land in foreign countries if these rights are based on contract, trust or equity and the defendant resides in Canada. In exercising this jurisdiction, Canadian courts are enforcing a personal obligation between the parties. In other words, they are exercising an in personam jurisdiction. This in personam jurisdiction is an exception to the general rule that Canadian courts have no jurisdiction to decide title to foreign land. The exception recognizes that some claims may have both a proprietary aspect and a contractual aspect. Canadian courts, however, will exercise this exceptional in personam jurisdiction only if four criteria are met. These four criteria, of which the second is central to this appeal, are discussed by McLeod4:
In order to ensure that only effective in personam jurisdiction is exercised pursuant to the exception, the courts have insisted on four prerequisites:
(1) The court must have in personam jurisdiction over the defendant. The plaintiff must accordingly be able to serve the defendant with originating process, or the defendant must submit to the jurisdiction of the court.
(2) There must be some personal obligation running between the parties. The jurisdiction cannot be exercised against strangers to the obligation unless they have become personally affected by it…
An equity between the parties may arise in various contexts. In all cases, however, the relationship between the parties must be such that the defendant’s conscience would be affected if he insisted on his strict legal rights…
(3) The jurisdiction cannot be exercised if the local court cannot supervise the execution of the judgment…
(4) Finally, the court will not exercise jurisdiction if the order would be of no effect in the situs…. The mere fact, however, that the lex situs would not recognize the personal obligation upon which jurisdiction is based will not be a bar to the granting of the order.
[13] The appellants submit – and I agree with them – that the respondent does not meet the second criterion. The deed created an obligation on the father, and now his estate, to transfer the two properties to the appellants. It does not create any contractual or other legal obligation between the respondent and the appellants. The respondent is a “stranger” to the deed and nothing in the record suggests that he is personally affected by his father’s obligation to the appellants. Moreover, I find no equities between the children that would affect the conscience of the appellants if they insisted on their rights under the deed. For these reasons, the respondent cannot invoke the exceptional in personam jurisdiction of the Ontario courts. Any dispute over title to the two properties, including any dispute over the validity of the deed and its terms, should be decided by the Italian courts.
[14] I would allow the appeal, set aside the order of Marshall J. and dismiss the application with costs. The appellants are also entitled to their costs of the appeal.
Released: April 13, 1999 “John Laskin J.A.”
“I agree, C.A. Osborne J.A.” “I agree, S. Borins J.A.
1 [1932] S.C.R. 734.
2 See McLeod, The Conflict of Laws, (Calgary: Carswell, 1983) at 321.
3 At p.739.
4 McLeod at pp.323-5.